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Corn Ethanol: The Rise and Fall of a Political Force

Despite the political pushback, the U.S. corn ethanol industry is in no danger of disappearing

Before there was E10 there was “gasohol,” another name for gasoline that had been blended with ethanol.
Image Credit: Michael Cote / Creative Commons license / Flickr

The 2016 presidential primary race is defying conventional wisdom, with erstwhile fringe candidates competitive in the polls despite their unorthodox policy positions. The Iowa Republican Caucus provided additional material for this storyline as Senator Ted Cruz defied projections and won the state.

His victory came despite his opposition to subsidies for one of the state’s biggest industries: the production of corn ethanol.

Those results would have been unthinkable just a decade ago, when American policymakers wanted to see as much corn ethanol consumed as rapidly as possible.

Now, however, more politicians — and voters — question or openly criticize corn ethanol, saying it’s been a boon to Iowa but has provided little in the way of environmental benefits or energy security.

Fueling the ethanol boom

Iowa achieves the highest corn yields in the world and, following the passage of an energy law in 2005, quickly became the center of a multi-billion dollar industry.

A full 30% of American ethanol production came from the state in 2014. If it were a country, Iowa would be the third-largest ethanol producer in the world, surpassing all but the rest of the United States and Brazil.

But the roots of corn ethanol’s political clout reach back farther than the George W. Bush presidency. The modern corn ethanol industry first came of age in the 1970s. That decade saw U.S. policymakers focus on energy security as the country was hit by oil embargoes even as its domestic crude production was entering a lengthy decline.

Federal tax breaks were implemented in 1978 on gasoline blended to contain 10% ethanol by volume — a fuel then called gasohol. A large tariff was also imposed on ethanol made from sugarcane imported from Brazil. U.S. ethanol production grew rapidly in response but from a small base, and ethanol’s impact on overall gasoline consumption remained low.

This situation changed drastically after the turn of the 21st century.

In August 2001, Saudi Arabia became America’s largest source of foreign oil. The discovery that the majority of the 9/11 hijackers were citizens of that country once again made energy security a national priority. The Bush administration unveiled several domestic energy initiatives in response, including a hydrogen vehicle program and tax credits for electricity made from renewable sources, such as solar and wind.

A larger tax credit for gasohol, which was restyled “E10,” had the most immediate impact of the new initiatives. This credit allowed companies that blend ethanol with gasoline to receive a payment from the IRS for every gallon they blended.

The combination of the tax credit and tariff caused ethanol production to increase by 700% between 2001 and 2010.

Ethanol production was so profitable that the country’s first ethanol mandate saw its target for 2012 reached four years early.

Around that time, there was growing concern that the fuel additive MTBE, which was designed to improve gasoline’s fuel performance but can cause health problems, was leaking from storage tanks and contaminating groundwater. That left corn ethanol, which also improves gasoline’s performance but does not persist in the environment as much as MTBE, as the only remaining fuel additive on the market.

Even as corn ethanol spread into more and more filling stations, scientists and watchdog groups questioned its environmental benefits, noting that carbon emissions are not necessary lower than those of gasoline alone and pointing out the significant amount of water and land required for corn ethanol production.

Enter the Tea Party

After the ethanol industry achieved its first mandated level of production, Congress quickly began work on an expanded mandate. But ultimately, corn ethanol’s rapid success led to its fall from political favor.

The year 2007 witnessed three major events that drastically changed the nature of the new biofuel mandate.

Democrats took control of Congress in early 2007 after campaigning on a platform that included environmental security. Shortly afterward, an article argued that diverting corn’s calories from stomachs to cars would cause widespread hunger among the world’s poor.

That article’s publication coincided with a sharp increase in the prices of corn and other grains, which prompted one UN official to label biofuels “a crime against humanity.” Another analysis conducted during the year concluded that corn ethanol wouldn’t drive food prices permanently higher. However, it also calculated that emissions from biofuels were higher than thought because farmers in the Amazon responded to higher ethanol prices by converting rainforest to farmland.

As opposition to corn ethanol grew, Congressional Democrats put a cap on how much corn ethanol could be blended with gasoline, at roughly 10% of gasoline consumption under the expanded mandate.

To meet higher volumes of ethanol production, the revised rules called for production of biofuels from non-food sources, such as wood chips or corn stalks and husks. The mandate called for these advanced biofuels to fulfill higher production targets by 2022 despite the fact the industry was non-existent in 2007.

Grain prices collapsed in 2008, and subsequent research has determined that Brazilian deforestation fell by 83% after 2004 even as corn ethanol production quadrupled, countering the argument that biofuels in the U.S. would lead to higher deforestation globally. The expanded mandate was already law when these findings became known, however.

Ethanol’s political problems were just beginning, though. With the rise of the Republican Party’s pro-austerity Tea Party wing, the blenders’ tax credit and ethanol import tariff were both being discarded by 2011. Tea Party opposition to the Affordable Care Act’s insurance mandate also led to the movement’s opposition to the blending mandate, most recently manifested by Cruz.

In 2013 the Tea Party gained a powerful ally in the form of the U.S. refining industry.

American refiners, the companies that turn petroleum into gasoline, diesel, and other products, are tasked with implementing the mandate’s blending requirements. Their collective compliance costs exceeded $1 billion in 2013 and remained high in 2014.

A large lobbying effort by the refining industry that began in 2013 called the mandate’s political future into question. This uncertainty was not dispelled until late 2015. In that year the EPA established future blending volumes that were higher than the refining industry had wanted but lower than had been originally expected.

A no-show for advanced biofuels

Despite the political push-back, the U.S. corn ethanol industry is in no danger of disappearing. Yet its future still might be limited by political and technology constraints.

The advanced biofuel from non-food biomass that was to surpass corn ethanol has mostly been a no-show, reaching just 4% of its original blending target in 2015 because of insufficient production. Efficiency gains mean that corn ethanol now achieves fewer greenhouse gas emissions than domestic gasoline.

Congressional opposition is too weak to exclude corn ethanol from the country’s biofuel mandate. On the other hand, it is strong enough to prevent corn ethanol’s mandate to expand to fill the place of the missing advanced biofuels.

Finally, ethanol’s tendency to damage older engines when used in blends exceeding 10 percent has constrained its ability to surpass current consumption volumes.

All of these factors have deflated ethanol’s stature from a decade ago. One need only look at the results of the Iowa Republican Caucus to understand just how much the fuel’s political fortunes have faded.

Tristan Brown is an assistant professor of energy resource economics at the State University of New York College of Environmental Science and Forestry. This column originally appeared at The Conversation.


  1. user-349933 | | #1

    Is ethanol good or bad for the environment?
    Interesting article but it doesn't really get to the point if ethanol is good or bad for the environment. I have heard that it takes more energy to produce a gallon of ethanol than you end up with. You need to farm the fields including energy used in the production and fertilizers to increase the production. Trucking cost to transport the crops... Is this all just a myth?

  2. GBA Editor
    Martin Holladay | | #2

    Response to Dan Vandermolen
    The two main objections to our government's corn ethanol program are that (1) diverting corn for ethanol raises food prices, directly or indirectly, and (2) there is no net energy gain because it take about as much energy to grow the corn, transport the corn, and distill the corn into ethanol as is contained in the ethanol being produced.

    Point (2) is disputed, however. You can read arguments on both sides of the issue. Whether it takes 80% as much energy to produce ethanol as the yield, or 120%, hardly matters, in my opinion -- the energy yield is low.

    For more information on this issue, see Ethanol Under Fire.

  3. STEPHEN SHEEHY | | #3

    Replacing MTBE
    Replacing MTBE with ethanol is definitely an environmental benefit. MTBE is very hard to remove from soil or groundwater when gasoline tanks leak, as they often do.

  4. Erocker | | #4

    MTBE is no longer used because it could end up in litigation. Twenty five states actually ban it. As of 2006 the federal government removed the requirement for an oxygenator in gasoline finding that a modern fuel injected car leans the mixture which adds addition Oxygen so an oxygenator is not needed. Some states still require an oxygenator by law. In California gasoline must contain an oxygenator of 5.9% of volume. Currently ethanol is the only oxygenator available now that MTBE is no longer used.

  5. BJPKC | | #5

    Ethanol and Greenhouse Gas Emissions
    "Efficiency gains mean that corn ethanol now achieves fewer greenhouse gas emissions than domestic gasoline."

    This sentence could use some unpacking. Fewer greenhouse gas emissions in its production, in its combustion, or both? Efficiency gains where?

    Overall, though, this is an informative overview of the history of ethanol in the US.

    By the way, motorcyclists are particularly concerned about the damage E15 can do to engines, and not just to older bikes. The AMA (not the physicians' outfit) has been lobbying against E15 for the past couple of years, at least.

  6. srenia | | #6

    Ethenol a good start
    Soy bio diesel is a better option. Deisel in general is a better option with the power density being around 30% higher than gasoline. US regulations have destroyed diesel industry in the US. Instead of giving grants to help VW issues, they fine them. The tax breaks given to electric cars alone have been premature. Why invest so heavily in electric when diesel gives 30% more fuel effeciency off the bat and biodiesel is easier to make than ethenol? Open ended questions.

  7. SwitchgrassFarmer | | #7

    Not optimistic about diesel
    Stephen E, I have driven pretty much only diesels for almost 40 years. Have diesel truck and tractors for the farm. Soy Diesel license plate frame on my little Jeep Liberty CRD grocery getter. Even took diesel mechanics night school. I love 'em. Unfortunately I think the VW fiasco will have the same impact that the Oldsmobile retooled gas engine problems did years ago, squelch diesels from mass appeal in the US.

    One other thing, biodiesel is not without its problems either. I have been running biodiesel for years, from B5 all the way to B99 one time. I can vouch that it does gel faster than regular diesel, and also can eat up certain types of rubber fuel lines and gaskets. (The tank full of B99 was cool, the tractor smelled like cookies baking!)

  8. Expert Member
    Dana Dorsett | | #8

    Get rid of internal combustion transportation, forget biofuel.
    We're at the thin edge of the wedge on the electrification of the transportation sector, and a fleet of EVs does a lot of good for power grid efficiency & stability as variable renewables become a larger fraction of the grid sources.

    Subsidizing biofuels to support a currently dominant and well evolved but dying-dinosaur technology like internal combustion engines (operating at LOUSY thermal efficiency) is a waste of capital. The simple math shows that even the most theoretically efficient biofuel source could ever support the internal combustion transporation needs. Indeed, covring the very same amount of real estate to support biofuels with 15% commodity PV solar to charge batteries at 85% turn around efficiency and used in a car with 80% battery-to-tire efficiency would be a far more effective use of that sunshine for transportation.

    Ten years ago that would have been unaffordably expensive, but 10 years from now it's a slam-dunk. (In terms of overall lifecycle ownership cost, PV + EV is affordable now if financed over the full lifecyle term. An EV has much lower maintenance costs, and should outlast their internal combustion ancestors.) The effect of taking even 10% of the transportation fleet electric would have a far greater benefit, and would drive down the cost of the fossil fuels used by the remaining dinosaur herd.

    Keeping policies designed in reaction to the OPEC oil spikes of the 1970s that later morphed into some fuzzy quasi-green paint when those rationales faded in to history is silly. Many agriculture subsidies in the age of the large corporate farms no longer have a legitimate rationale, but have become political footballs, and are difficult to remove.

  9. user-4243359 | | #9

    Corn Facts:
    40% of the US corn crop goes into ethanol (USDA-ERS 2014). The largest consumer of corn is animal feed at about 50%, the lowest is direct human consumption at less than 10%, most of which is sweeteners and oil. The US now produces 5 times more corn than in 1950.

  10. exeric | | #10

    Andrew, Upton Sinclair said
    Andrew, Upton Sinclair said this: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

    Also, I wouldn't be too confident about how far off it is for replacement of petrofuels by electricity. I'm sure people said the same thing about the complete phasing out of horses at a similar point. All it would take is a revolutionary technology like lithium air batteries to have the remaining kinks worked out. They would have about 90% of the energy density of gasoline or diesel. Even electric jet fighters may be feasible under such a scenario. I'm not at all saying its a done deal, but the opposite conclusion is an equally invalid conclusion.

  11. SwitchgrassFarmer | | #11

    Waiting for my battery powered farm tractor!
    1. This widely accepted notion of big corporate farms is incorrect. Even Mother Jones had an article that illustrated it is the exception rather than the rule. Most large farms are run by families that typically have been in business for generations. These are good solid people who are involved in their community. For example the huge dairy farm near me hosts multiple charity events each year.

    2. When I built our new house I put in a wall outlet for an electric vehicle. I agree that they make sense in some circumstances, and if I win the lottery I will definitely buy a Tesla. However it's going to be awhile before batteries and motors can provide the kind of long term high power required for heavy duty trucking, construction, agriculture, etc. Even harder to build is that battery powered airplane that can carry more than one person and his/her iPhone. We need those machines, and a non-dino fuel answer is...wait for it...biofuels.

    3. I know a tiny bit about biofuels, being a switchgrass grower I have been working with biofuel researchers and proponents for a number of years now. Yes, the progress is excruciatingly slow. Right now some of my biggest customers are vegetable growers for mulch; they like that I use almost no chemicals, something that you can do with perennial biofuel crops. (I actually may put the field in to the organic certification program, it's been a few years since I did any spraying.)

    The industry joke is that advanced/cellulosic biofuels "are just five years away", and that we say that every five years. There is progress though, and we need to keep at it for the security of our country. There is no such a battery powered fighter jet.

  12. SwitchgrassFarmer | | #12

    "When are they gonna have the flying cars, already?"
    "And the underwater bubble cities?" Seinfeld, not as erudite as Upton Sinclair.

    Before I retired to come back to the ag community I worked with digital technology designers/developers/manufacturers. I saw how technology (the Internet) was going to destroy the business I was in (television and newspapers), and my wife and I made a plan to "escape". And escape I did, just before the company that had employed me for nearly twenty five years went bankrupt.

    So I have seen first hand how technology disrupts; it's wonderful. We must continue to support the types of pure research that support such evolution. One doesn't know where the next Bardeen or Shockley will come from. Unfortunately future technology doesn't handle today's needs.

    A lot of those Toyota Prius cars parked at Whole Foods got here on a big hulking ship driven by a huge diesel engine that conceivably could run on soy biodiesel. (It would be "fun", and probably frightening, to pencil out how many acres that would be.)

    My point is that first and some second generation biofuels are available today. Jets have flown already on bio-based aviation fuels. The ethanol industry exists now. Biofuels have a place at the table, just like solar, wind, hydro, and yes even coal-petroleum-natural gas-nuclear.

    Let's dream, but be real at the same time.

  13. exeric | | #13

    It's only physics
    Andrew, I can't help but think that you are using "common knowledge" that you haven't actually studied to jump to conclusions. You are being way too facile about a lot of things on this topic without doing the proper research. Everything you've said, especially including the bubble cities reference, is just the obvious tactic of bringing up something ridiculous to heap scorn on scientific knowledge. Energy density in petroleum products is THE thing in the physics sense that allows jet planes to operate. It is not about heat, or combustion products or anything like that. It is the simple physics of energy density per weight used to propel objects. All the rest are details that may, or may not be physically possible. I'm thinking you just aren't aware of these principles and using an uninformed intuition to come to erroneous conclusions. Read this:

    Again, I'm far from saying all the obstacles will be overcome, especially the requirement right now to use only pure oxygen in the chemical reaction. But if they do overcome what many scientists considered only technical problems then electric jet fighters are actually possible. The lesson: it's often much more important to understand what one does not know than to know what you do know. Especially if what you do know is wrong.

  14. SwitchgrassFarmer | | #14

    Bravo Eric.
    Clearly you have superlative passion as to the future potential of energy storage. The world needs people like you to keep skeptics like me in check, else nothing new would ever be created. That is a sincere complement.

    Now I am going to go watch Pawn Stars. I wonder what mischief Chumlee is in today?

  15. Dana1 | | #15

    Of course not all equipement will be electric.
    It doesn't even take a majority of the commuter cars running on electricity to decimate the price of fossil fuels 10% would make an obvious effect, 20% would be game over for making a buck on the more expensive to extract stuff. Spending the money on the already in production electric technologies delivers more than an order of magnitude more enviro bang per buck, and it's only getting better over time (and quickly!)

    Sure, it'll difficult to do long haul aviation on batteries, and most heavy equipment & farm equipment too. So what? As a fraction of the world consumption of fossil liquids today that's pretty small spuds. And so what if shipping will be running on oil for a long time? (I hope that ship full of Priuses wasn't actually burning anything as expensive as #2 distillates- most burn much heavier and cheaper stuff than that. The point is, limping along with very slow progress on a techology with low (or negative) payback to support a low-efficiency 19th century technology like Rankine cycle internal combustion engines makes no sense at all in the long term, or even the intermediate term. The alternatives are clear, and pretty-much here already, with rapidly improving capacity/utility and rapidly falling cost.

    Sure, the further off the grid the application is, the longer it will be before there are practical electrified solutions. But most of the developed world (where fossil liquids are the paradigm, and most of the fossil liquids are consumed) are already on the grid.

    In areas with policy support the PV carport concept is gaining traction, and it's really not very expensive at all on a lifecycle basis- WAY cheaper than $100/bbl crude, if (for the time being) still more expensive than $25/bbl crude. (PV beat out $8/bbl subsidized oil for electrical genertion on the Arabian penisula in open bidding last year.) Fossil fuels are commodities, with price volatility. Biofuels have yet to make parity on $/MMBTU, and take enormous resources to deliver. PV & wind & batteries are technologies, all of which have a financial "learning curve", falling in price at a predicable amount with each doubling of production, and the crossover points in price/cost between the technologies and the commodities is happening RIGHT NOW, just not everywhere right now.

    The 20%+ per doubling learning curve of PV solar over the past 40 years is actually steepening. What cost $10/watt at the utility scale 10 years ago has now dropped under $2. Wind power has had comparable cost shifts in the same time frame, and both are competitive with natural gas generation, even at the historical low $/MMBTU prices of recent years. Spurred on by subsidy, more PV capacity will go onto the grid in 2016 than gas fired capacity (and more than wind power too.) This party is just getting started. By the time the federal subsidies disappear in the early-mid 2020s it will be the cheapest form of new electrical power of any type, and may even be challenging legacy hydro on cost. What utility scale PV cost 3 years ago is this year's cost for residential scale stuff. (PV is averaging $3.16/watt and falling in the US this week, under $2/watt in more mature markets like Australia & Germany.)

    This doesn't take a "breakthrough" or "pure research" to deliver this disruptive low cost- all it takes is implementation, which the world markets are already doing- that train has left the station and is essentially unstoppable. The faster production doubles, the faster the prices fall (in calendar time.) Doubling of PV in recent years has been 20-24 months, but as it crosses price thresholds making even more cost-competitive it's accelerating. Sure there will be innovation to keep that going, but it doesn't take a breakthrough. The path to buck-a-watt solar on incremental improvements alone is already clear.

    Show me ANY biofuel that has comparable learning curves, or that doesn't have inherent physical space resource limits!?! Even if there is a breakthrough, the math doesn't add up in terms of total acreage under cultivation to support even 10% of the transportation needs of the US.

    Eric: "'s often much more important to understand what one does not know than to know what you do know. Especially if what you do know is wrong."

    Mark Twain's version of that was:

    "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

  16. SwitchgrassFarmer | | #16

    Go figure, being a biofuel advocate on GBA is a lonely job!
    Informative and persuasive points Dana. Thank you.

    Probably shock you to learn that last week we began the process of certifying our home as Zero Energy Ready. Our GC, outside of being experts in green building, are also the leading solar installer in our area. (We were supposed to do the NAHB program, but the rater died mid-project, oh boy.)

    Our home was designed for PV panels on the roof, but I think we will do them ground mounted instead. (Really more enamored of small wind, but that is far from payback positive.) First though we need to get to a point where we have recovered from the original construction costs. Maybe we will have yet another energy source to debate by then.

    Come visit if you ever find yourself in Central PA. (You too Eric.) We can test the abilities of ethanol by sipping some fermented beverages!

  17. exeric | | #17

    Andrew, I wouldn't feel too
    Andrew, I wouldn't feel too lonely. I'm probably staking out an even more lonely position when prognosticating electric aviation in the near future. Even Dana thinks that of course that won't happen! We are all lonely in our own way. I may take you up on that offer if I ever get out that way.

  18. Dana1 | | #18

    Electric aviation will happen...
    ...just not nearly as quickly or completely as the electrification of other types of transportation. In the nearer term it will be fairly lightweight and short-haul, not long range bombers or transatlantic passenger liners. There are no commercially available electric planes in 2016, whereas there are dozens of electric cars. The major auto manufacturers are gearing up for dozens of all-electric plug-in car models in the next five years. There's nothing comparable going on in aviation (yet.)

  19. AlanB4 | | #19

    Corn ethanol is a bad idea,
    Corn ethanol is a bad idea, its ironic that its slow downfall is not because of its reality but because of backward politics and electric cars.

    Dana makes a good point that more electric cars means lower oil prices because of reduced demand. Projecting forward from that as oil keeps falling the economics advantage of electric cars falters as well. Will this mean oil hits a bottom and keeps a share of the market, or does it mean oil dies. Who is to know. If oil prices dropped to $5 a barrel only a few producers would remain viable, but unless refining somehow jacks up the price gasoline would no longer be profitable to produce.

    As for planes, farm equipment and other oil driven products (like plastic and shampoo) we will develop alternatives to power them, plastics are only made from crude because its the cheapest carbon source (and would be cheaper if oil crashes). Planes and heavy equipment will be electrified if the batteries get to high enough energy density, or by then we may have fuel from air, if we develop technology to to convert CO2 to oil at cost effective pricing. Such a technology would actually be a bad thing today, because while it would be carbon neutral, air pollution and other gasoline engine environmental costs would remain

  20. SwitchgrassFarmer | | #20

    Please read this NYT article about oil pricing...

    It's about the Saudis using a price war to starve out rivals. Plain and simple. How long and at what level that goes on is TBD.

    This is good and bad.

    The bad, is that public interest in alternative energy is directly tied to Joe Six-Pack's wallet. Cheap oil means he has little interest in energy efficient transportation, green homes, etc. And in turn that means less interest in technologies that are better from a climate change perspective.

    The good, is that these low prices will shake out inefficient technologies. The bickering in this thread about what techniques continue to have merit, just an indicator of that.

    The market will speak. Those of you that don't like first generation biofuels may get your wish, some ethanol plants have already been shuttered. Unfortunately that means jobs lost. That's not pleasant; those jobs belonged to our family, friends, and neighbors out here in fly over country.

    In PA we have a long history with the extractive industries and their forerunners. First it was the timber industry that leveled the trees across the state for fuel and charcoal. Then it was coal that used strip and underground mining to support our country's industrial growth. The first commercial oil well was drilled in NW PA. Of late it's been the Marcellus Shale boom. Even the wind industry had a big presence in Pennsylvania before all the wind farms were built and the turbine factory closed. Not one of these industries came and went without some environmental damage; that is indeed awful. What I want you to remember is that it was done on the backs and lives of hard working Americans. Please think about that when you rail against certain forms of energy production.

  21. Expert Member
    Dana Dorsett | | #21

    Railing against certain forms of energy production?
    There's a legitimate question whether US biofuels production to date has had a net "energy production" at all!

    More recently it has perhaps made the break-even mark, but it's been an expensive struggle to get there. Biofuels have accomplished very little in terms of the stated policy goals of US energy security, and even less in terms of a later-evolved rationale for having a lower global warming footprint. Automotive fuel efficiency standards have had a lot bigger impact on both, but even that impact will look pretty tepid in the face of simply displacing liquid fuels with electricity from diverse sources. By divorcing a good chunk the transportation sector from liquid fuels the ability to shift toward locally sourced transportation energy goes way up.

    The wind-bust in PA was an artifact of wavering policy support for wind, driven in part by competing fossil fuel interests. The notion that "...all the wind farms were built..." is simply not the case. Perhaps all of the wind farms under a particular set of goals have already been built in PA (don't know enough about PA energy policy to say for sure), but the technology has had dramatic year-on-year improvement along with much year-on-year reductions in cost. I doubt very much that the last wind farm to be built in PA already exists- quite the contrary.

    After 5 years of $100/bbl oil most people are not assuming that $25/bbl oil is going to be around forever. Even if $5/bbl oil were available there will still be policy resistance to increased use of that resource from a world now becoming convinced that most of the known fossil fuel reserves need to stay in the ground to have any chance of meeting greenhouse gas emissions goals. The current oil glut is as much flattening of demand growth due to China's policy shifts and lower-than expected economic growth as it is Saudi oil-production policy. In some ways the Saudis have it right- they need to pump & sell it while it still has value, possibly prolonging the inevitable decline in oil demand in the process by making oil-demand-eroding alternatives less economically viable in the near term. Almost all the growth in oil demand for the past three decades has been in China, and Chinese oil policy is undergoing a sea change for a number of internal reasons. India has seen some growth in oil demand, but can't afford to send ever greater amounts of hard currency out of the country. Oil demand in the developed world has been flat or falling.

    Beyond railing, the sober facts are:

    *There isn't enough real estate to displace very much of the liquid fuels use in the US with biofuels even in best-case scenarios.

    *There are financially viable electric alternatives covering with lower lifecycle costs (even at today's lower pricing on liquid fuels) for a large slice o' the transportation energy pie.

    *Projected improvement timelines in both function and cost for those electric alternatives are consistently being beaten. Competition in the EV (and grid) battery market is fierce, with billions in private capital going into large scale battery production facilities, which yet to get ramped up to speed, but will be within the next five years. (The Tesla battery plant in Nevada should be in full production before then: )

    *Unlike biofuels, the real estate and other resource requirements for a largely electric transportation sector are modest, and can be met without competing with food production or other valuable resources.

    Seems like the Oregon legislature has head this tune and is now humming along:

    (See the heading "TRANSPORTATION ELECTRIFICATION PROGRAMS", beginning near the bottom of page 12.)

    See also:

    "According to estimates by Earth Track founder Douglas Koplow, if current laws are maintained until 2022, the biofuels industry will receive more than $60 billion per year in subsidies, more than six times the $9.5 billion in support received in 2008. Cumulative subsidies between 2018 and 2022 are expected to total $420 billion. If the Obama plan to require 60 billion gallons by 2030 comes to pass, subsidies in that year would be $125 billion, and cumulative support from 2008 to 2030 would be in excess of $1 trillion."

    A trillion 'merican shekels is a lot o' jack. Is this really the best way to spend it?

    Separating out the fraction of PV and wind power subsidy that might rightly applied to the transportation sector may be pretty tough to do, but the total amount of subsidy for electrification of transportation is piddling in contrast to what's been happening with biofuels for decades.

    It's legitimate to question whether the US wouldn't be better served burning crop residues in biomass fired electricity production at 25% thermal efficiency to run transportation systems at 80% efficiency from grid to battery to where the rubber meets the road rather than growing fuel-specific crops like switchgrass or algae to be converted to ethanol at some barely better than break-even seed-to-fuel net thermal efficiency, only to then burned at 20-25% efficiency in rankine cycle internal combustion engines. The math just doesn't work in favor of the liquid fuels, due both the abysmal efficiency of the internal combustion engine, and the abysmal seed-to-liquid fuel thermal efficiency. Together the seed-to-tire-on-pavement efficiency is nowhere near the same ballpark as commodity 15% efficient PV-to-tire-on-pavement, and the latter can get dual use out of the real estate required to get there (parking lots and buildings). PV is just one already-affordable source that's getting cheaper by the hour.

    Fifteen cent retail electricity in a Nissan Leaf is roughly comparable in marginal fuel cost to $2 retail gasoline in a Toyota Prius. By the time you factor in the oil changes and other maintenance specific to the crummy internal combustion engine, the Leaf wins on cost of ownership, hands down. The lifecycle cost of a Tesla Model-S is comparable to that a Toyota Camry. It's only going to be increasingly more competitive going forward, even if oil stays at $25/bbl, since technology improvements never sleep especially when the technology is poised for exponential growth. Whether biofuels get subsidized or not, they're poised to become irrelevant in the bigger picture fairly soon (as if they were relevant to begin with.)

    Pointing out the rapid progress toward electrification of transportation isn't railing against oil or against biofuels, even if the cost/benefit and other aspects come up. It's acknowledging that we're at the thin edge of an exponential wedge that is soon to become dead-obvious, even to folks who have yet to notice the all-electric cars in their midst. (In the EV spotting game today it was a 2-Tesla 3-Leaf day on the way in to work, and that's without really paying attention. While picking up lunch I passed a shiny new Chevy Volt, but as a hybrid that doesn't really count, 'cuz the myriad Priuses would otherwise tax my counting capabilities. :-) )

    Had biofuels been a financially viable solution to energy security we'd have had it in spades when it was competing against $100/bbl oil for 5 years, after 3 decades of subsidized development. When looking at it from a climate change perspective it's really not a promising path either. In 1980 I had great hopes for ethanol, and even as late as 1995 I thought it had a shot after watching Brazil's successful transition away from oil imports. But not any more. Even if biofuels evolve to become cheaper than $25/bbl oil with much improved production efficiency, the EV train has already left the station, with a clear path toward market dominance by mid-century.

  22. SwitchgrassFarmer | | #22

    I knew it...
    I just knew you were going to respond Dana, and in an extremely thoughtful manner. I admire your tenacity!

    Over the day I have been thinking about what you were going to say; I had some of it right. Now though I am busily grinding up dead ash trees here on the farm, all that the Emerald Ash Borer killed. Ah, the downside of international trade, invasive pests.

    I will salvo back. Could be a few days or so, once I get past "the make hay while the sun shines" thing that we farmers deal with.

  23. STEPHEN SHEEHY | | #23

    Ash borer
    Andrew- do the borers ruin the ash trees for use as lumber?

  24. SwitchgrassFarmer | | #24

    Ash Borer - Lumber
    Stephen, yes the logs are pretty much intact, at least the ones at my place are. I will try to take down a "fresh killed" bigger ash tree to take some pictures, and start a new topic here on GBA. Milling and using all this dead ash lumber is probably going to come up eventually. (I have been focused on cleaning up smaller dead ash and other crummy trees, mostly because that is what fits in my chipper.)

    The biggest problem with the ash borer has been the quarantines. You haven't been able to legally transport the logs much of any distance, so a lot of it ended up being used as firewood on site or was chipped, both things I have been doing. The rules have loosened up recently though, due to the widespread nature of the outbreak. I have some USDA people here in a few weeks, I will likely know more then.

  25. SwitchgrassFarmer | | #25

    BTW, Wood Chips are a Biofuel
    We have a number of schools in PA that are heated with wood chips. And, you can make cellulosic ethanol out of wood chips. So you can take something that is a problem (Emerald Ash Borer killed trees), and use that material productively.

  26. Expert Member
    Dana Dorsett | | #26

    Some weekend reading for biofuel enthusiasts
    There is nice bit of analysis by Mark Lewis of Kepler Cheuvreaux (a large European investment bank) from a bit over a year ago regarding the net-energy proceeds of the PV-wind & EV vs. oil & internal combustion engine at various price points online here:

    Early on in the analysis is some discussions on the impacts of biofuels. As of 2013 the net-energy gains from all biofuel liquids worldwad was estimated be roughly 2% of the world supply of liquid fuels, up from about 1% in 2005. (See Figure 5.) While doubling it's share in 8 years is impressive, it will still be quite awhile before it reaches a double-digit percentage (probably never) of the transportation fuels market, Brazil's and Team America's biofuel programs notwithstanding.

    But we're also on the initial edge of the electrification of transportation, with strong policy support China, the primary driver of liquid fuels demand growth in the past two decades.

    Bear in mind, this piece was written on the cusp of when the oil price crash was just beginning, but also note that the $3 Billion/ giga-watt ($3/watt) price used through out is actually today's small-scale residential scale price for PV in the US. The $2.2-2.6 bn/gw future price postulates for Y2030 were actually beaten (soundly) in 2015 even at the intermediate scale. At the utility scale buck a watt solar will happen well before 2025, probably before 2020. So when looking at the net energy return on investment data, mentally triple or quadruple the energy return for solar. Wind is also overpriced in that analysis compared to current reality, but it's close enough to illustrate the point. (The target audience was really energy investors and energy industry board members, not us schlubbs up here in the peanut gallery, and they really underplayed the actual much lower anticipated costs of renewables, probably to avoid the argument from the oil-company boards that they were sandbagging.

    If you take a look at Figure 73, p121, investing $100 billion /year for 10 years on transportation energy return on $1.5/watt onshore wind is competitive with oil with an extraction cost of $50/bbl. If you triple the return on $3/watt PV cited to reflect where $1/watt PV would be, it's in that same ball park.

    Figure 74 shows the return if investing the same amount per year for 20 years, and $3/watt solar is competitive with $75/bbl oil (extraction cost), and onshore wind is competitive with $25/bbl oil.

    The price of oil is temporarily lower than that, but the cost of both PV and wind are already MUCH lower than that, and continuing to fall. Clearly spending $100 billion/year on solar or wind at their real (and falling) prices would reap MUCH higher net energy than the fixed $/watt pricing used in the analysis.

    There is ample reason to believe that the current price of oil is unsustainable (multiple oil producing countries that get most of their revenue from oil can't pump fast enough to cover their budgets at $30/bbl). But even at $25/bbl (extraction cost) oil the net energy return is right in there with buck a watt PV, or $1.5/watt onshore wind (higher than current wind project costs.) On an energy cost basis alone low-carbon electric transportation technology wins, and as it ramps up it will put continued downward pressure on liquid fuels markets. As liquid fuels market decline in volume, it's not clear how long biofuels will be relevant in the larger picture.

    As oil frackers have been pumping like crazy to cover their financing costs with now deflated price goods, oil production has started to fall in the US (see: ), and that will probably pick up speed in the coming months. Eventually petro-states will also go bust at this price and face significant political heat at home. It's not clear exactly when the oil glut will dry up or how, but the low production cost countries won't be able to live with this price forever unless they are forced to (at great political peril for their leaders). Demand erosion continues apace in the US with the ramping up of automotive efficiency standards, and demand growth is poised to reverse itself in China. But even at $25/bbl extraction costs US sourced oil can't beat solar / wind + EVs for much longer. Ramping EVs, wind and solar has the potential to make the US (and China) truly energy independent, at lower cost than biofuels (or even $25/bbl imported oil.)

    Test driven an EV yet?

  27. georgepds | | #27

    Re biofuels

    One advantage of biofuels over electric storage is energy density.

    Another advantage, not often mentioned, is long term storage. Battery technology can offset use from day to night; the Tesla power wall is good at this offset. What it cannot do is offset usage from summer to winter. Those of us who produce an excess of power with our roof top solar, must rely on the artifice of net metering to provide that offset.

    I’m not suggesting that ethanol is the answer. There is not sun to ethanol solution that does not involve tractors and lots of land. I’m suggesting batteries alone and current electric storage solutions are missing the seasonal storage capability. Biofuels, or something very like them ( H2?) do

    To suggest “This doesn't take a "breakthrough" or "pure research" to deliver this disruptive low cost- all it takes is implementation, which the world markets are already doing- that train has left the station and is essentially unstoppable. “ misses the problem of long term storage

  28. Expert Member
    Dana Dorsett | | #28

    Haven't missed the storage issue at all (response to george s)
    Energy density only matters if you have to move the battery on board the EV. If there's anything with a learning curve as fast as PV it's the current land-rush toward energy storage. At $100/kwh lithium ion is plenty good for 200+ mile range EVs that are as cheap or cheaper than internal combustion drive cars. Both the energy density AND cost learning curves for lithium ion are pretty good (not that it won't eventually be replaced with something better).

    There a clear path to cost competitiveness against current technology based on production volumes and learning curves. Tesla's current car batteries are estimated to be running $150/kwh, and that's even before the gigafactory in Nevada is in production. That factory alone would double the 2015 worldwide production levels for lithium ion batteries, but there are similar factories being built in Europe.

    The fact that there are now three multi-trillion dollar industries investing in lithium ion battery technology & production (automotive, electric grid, and portable electronics) there's no question that it will get there. Projections by experts from 2-3 years ago on price & performance for Y2020 have already been beaten- it's happening faster than most people (even industry insiders) think.

    For longer term non-portable storage are multiple flow battery technologies currently being deployed in grid applications and they are getting better every hour, typically in grid-storage apps.

    The wind blows somewhere every day, and utility scale wind is already cost competitive with natural gas (even at record low fuel prices) on a levelized cost basis, with year on year improvements in capacity factor. You don't necessarily need to store summer sunshine for winter driving use- nobody really believes that PV will take a 99% grid share, even AFTER it's the cheapest thing around. An electric car doesn't need special source fuels. A combined cycle natural gas generator with 50% fuel-to-load efficiency charging a car battery with 85% charger to where the rubber meets the road is nearly twice as efficient as burning liquid fuels in an internal combustion engine. Even in winter PV will be providing a double-digit fraction of the grid power by 2030.

    Wintertime output of PV in the US is still at least half of it's summer output, and at some price point you can just curtail the excess, and still have affordable wintertime energy uptake from PV. We're perhaps too used to the notion that PV power is expensive. It WAS expensive at $50/watt installed cost, and is still more expensive than other sources at $5/watt all-in. But at $0.50/watt it's only a matter of how much site real estate can be devoted to PV.

    And the industry will get there. Panel costs in the US in 2015 averaged 57 cents/watt, and utility scale PV was being installed at ~ $1.50/watt (before subsidies are applied):

    There's no floor to this trend on the horizon, and plenty of room for "breakthrough" quantum steps down in cost. Perovskite thin film PV technologies look really promising for bringing panel pricing to under 10 cents/watt, but isn't really necessary to make PV cost competitive with incumbent power sources. Right now at the residential scale supply chain & contractor margins account for fully half the cost to the end customer, but in more competitive markets those are much thinner. When it's a mature market they'll be razor-thin.

    Conversion to H2 to be injected into the natural gas grid is a popular idea in Germany as a means of getting greater utility out of the excess intermittent power from wind & solar. Storing H2 seasonally has lots of issues, and it has lousy energy density in fuel cell cars relative to lithium ion, even at very high pressures. It's only advantage is speed of re-fueling, but that's not going to be nearly enough to make up for it's abyssmal efficiency compared to battery EVs.

    With a speaking style almost as exciting as Dr. Ben Carson's you may need a double espresso to sit through one of his speeches, but Stanford's Tony Seba (a tired-sounding but tireless self-promoter) has successfully predicted how the roll-out of the EV disruption would happen in every respect except timing. It's in fact happening much faster than he was suggesting. Next time you have 40 minutes to kill, grab a dose of caffeine and see if you can't make it through one of his keynote lectures:

  29. georgepds | | #29

    comments on Dana's response
    Long (season to season) term energy storage remains a problem

    I took a look at the EIA figures (*) on coal and natural gas storage. We store roughly 200 million tons of coal in the US and 1 trillion cubic feet of natural gas. That’s quite a bit of energy to have ready for use at a moment’s notice, and it does not include hydro, nuclear, or oil storage. There is no equivalent long term storage in in the PV/wind resource. There is a need for a storage mechanism that does not yet exist. You note

    “Wintertime output of PV in the US is still at least half of it's summer output, and at some price point you can just curtail the excess, and still have affordable wintertime energy uptake from PV.”

    If I read your response correctly, you suggest the answer is to overproduce at all times, and just dump or turn off the excess when we do not need it. It may or may not be realistic, but the amount of energy we currently store on hand suggests that storage is essential.

    Let’s do a rough calculation using your estimate. If we size for PV winter energy needs we have twice as much capacity as needed in the summer. No matter how cheap PV is or will be having a national capacity twice what is needed in the summer is not an efficient allocation of resources

    As an aside, there is a logical fallacy in the above. It is not production capacity, but household need that that is the relevant factor. I’d argue in the colder states the energy use doubles in the winter time just as the PV production halves. Sizing for winter use would require a PV capacity roughly 4 times that needed in summer

    I am not arguing for coal or natural gas. I am arguing for the need for development of long term storage for renewable energy

    (*) 3/21/2016 3/17/2016

    Got a figure on US oil storage roughly 1.5 billion barrels

  30. Expert Member
    Dana Dorsett | | #30

    And the wind never blows in winter, right?
    Nobody (that I'm aware of) believes that a solar-only solution is the holy grail, even when it becomes cheap enough to simply curtail output (throwing some of it away) when there isn't sufficient load or storage available. It's clearly possible to scale PV appropriately for best economic advantage for the circumstances as the learning curves continue to dive. This is not as a hard problem from at technology point of view as it is from utility-regulatory-environment point of view. It get's a lot easier when there are lots of electric vehicles and smart car-chargers, but they're not necessary.

    There are already commercial grid storage products available taking advantage of the low price of used Nissan Leaf batteries that no longer have the cycling depth necessary for use as a commuter car, but PLENTY for managing the peak loads of buildings. When a double-digit fraction of the car fleet is electric, the grid storage problem begins to solve itself, as more used EV batteries become available for re-use as grid storage, at a price point much lower than new batteries. An EV is an easy and useful place to dump the excess. Nissan is currently marketing EV-to-grid solutions in Europe for using the car itself to supply peaking power to the grid (under grid-operator control) in countries where electricity markets that allow the EV owner to be compensated for that use.

    Regarding the EIA daily from 3/21 & 3/17, so what if centralized generators and natural gas distribution companies need to stockpile fuel? Storing gas for the winter simply an artifact of pipeline and extraction rate capacities relative to local peak & average peak loads from the gas grid, and the demands of grid operators for guaranteeing reliability. There's currently a gas glut- not enough space to store much more, which is keeping prices lower than they otherwise might need to be. It's a curious artifact of the current glut, but not relevant to the EV discussion or what that might mean for biofuels or whether a future solar-heavy grid would need to store summer sunshine for winter driving. Grid operators require dispatchable large scale generators to store fuel to guarantee that they are capable of delivering the contracted for power when it's needed. Without gas storage generators and others all sucking from the same pipeline & well straw would require vastly bigger pipelines and many more wells to manage the daily peaks, let alone the weekly/monthly/seasonal averages. Local storage is just plain cheaper (and more reliable) than big-bore pipelines.

    When the "fuel" is sun and wind, it's possible to simply estimate on historical data how much will be available on particular hours, days, or weeks. You don't need a battery big enough soak up enough summer sun for dispatching during winter periods- the amount of "fuel" to expect during a winter period within a region is known. The sun shines and wind blows at very predictable levels in the aggregate, and the peaks/valleys within those periods can be managed by demand response and quite modest amounts of storage.

    The storage value of biofuels is limited, and becomes even less valuable once even mid-single-digit percentages of the US automotive fleet is achieved, and there are several factors driving that change over. The lifecycle cost to the owner of a Tesla Model S is comparable to a Camry. Cheaper EVs are even cheaper. And the cost curves of the components underpinning EVs are relentlessly falling. (Ramez Naam's take on it: ) No matter whether it's photon-farming, nukes or natural gas, the vehicles themselves already make financial sense, and will continue to be more so year-on-year, which is why ALL of the auto companies are getting into the plug-in game. Even if you think seasonal storage is necessary, the stored energy fraction for powering EVs can be anything from fuel rods for nukes stacks of coal, or water behind a dam- it's flexible, unlike liquid fuels specifically designed to be squandered at truly crummy efficiency in a internal combustion engine.

    BTW: The EIA is the next-to-last resource you'd ever want to refer to regarding intermittent renewables (the IEA being dead-last). They have consistently under-projected the growth of both wind and PV for 30 years, and not by just a little bit. For the past 20 years the organization that has had the best predictions of what actually came to pass has been (much to everyone's astonishment) GreenPeace, and even those weren't even predictions, but rather their assessment of what was economically feasible. Predictions of where wind & PV would be at this time made as recently a the turn of the millenium were recently skewered by the measured reality presented in Al Gore's (yeah, that Al Gore, inventor of the algorithm :-) ) in a recent TED talk in Vancouver: (If you can't stand his voice, scroll ahead to the 13:00 mark, through about 15:30 for the Y2K projections vs. actual reality.)

    There is too much linear thinking (by those who should know better) when it comes to energy technology markets that are seeing exponential growth. With PV doubling every 2 years, once it's crossed the 1% threshold (which it has) it's less than 15 years away from 100%. PV is a disruptive technology, so is the lithium ion battery. Together they will render biofuels (and to some extent, the price of a barrel of crude oil) irrelevant for most energy markets in less than a decade. In order to compete in future energy markets biofuels will have to take on a similarly exponential track RIGHT NOW. But there's no evidence of that happening, and plenty of reason to believe that it can't.

  31. Expert Member
    Dana Dorsett | | #31

    A laughable (if it weren't so serious ) EIA prediction for PV.
    See the levelized cost of power predictions for PV solar in Table 1 on p. 6:.

    The all-in (before subsidies) total system LCOE of utility scale PV was projected to be $125.3/Mwh (= 12.3 cents/kwh) by 2020. That projection was published in June of 2015. The actual real-world LCOE of grid scale PV power in several US installation was already less than half that as of Q4 2015.

    Lazard's snapshot of on-the-ground reality of LCOE published in November 2015 put the unsubisidized cost of silicon PV at utility scale for the year at between $58 and $70/Mwh, or half what the EIA was projecting for 2020:

    What, the EIA misses the boat? (Again?) It's doubtful that the LCOE will double in cost by 2020- a more likely scenario probably be in the $35/Mwh range by then. Even small scale rooftop PV will be WELL under $125/Mwh by 2020. (It already is in some parts of the US.)

    The explanation for getting it so wrong is probably just another case of linear thinking starting from stale data sets, in the face of exponential trends.

  32. AlanB4 | | #32

    @ Dana
    I mostly agree with you, but 15 years is unrealistic, 25-50 years is more likely. I would be very happy to be proven wrong ;)

    I don't think the lifetime costs for a Camry match a Model S (though the difference is less then most people think), but thats not the point, the Model 3 will butcher even a Yaris, it would be stupid to not own electric.

    I do think a carbon tax is necessary (revenue neutral or not needs study), though in the current political climate its political suicide (amazing isn't it that saving the planet is bad...). In its place we should at least eliminate fossil fuel subsidies, redirect that money to renewable R&D and expand the current solar/wind subsidies.

    Finally li ion is not a disruptive technology, is a sexy one, lead acid or even nickel iron can be deployed at much cheaper lifetime costs, but are old and boring. The Biggest effect of the Tesla Powerwall is hype. That being true positive momentum is still a very good thing.

  33. Expert Member
    Dana Dorsett | | #33

    Norway isn't USA but...
    Alan B: In the face of disruptive technologies with exponential growth trajectories 15 years is eternity.

    In 1900 about one vehicle out of 20 in US cities was an internal combustion car- the rest were drawn by horses. By 1915 one vehicle in 50 was horse drawn.

    How many people had cell phones in 1990, maybe 1%? How many people had cell phones by 2005? How many people actually needed a land line in 2005 (other than for internet access)?

    Well before 2030 small cars and light truck sales in the US will be predominantly EV, and nearly all others will be plug-in hybrids. There will still be a lot of liquid-burners on the road in 2030, but the new stuff will be largely electric drive.

    The current transportation plan under consideration in Norway (OK, tiny population, but an oil producing & exporting country) will require all new light trucks,cars and buses be zero emissions (either battery, or hydrogen fuel cell, but no liquid fueled internal combustion) beginning in 2025.:

    Snakker du Norsk?


    Here's a short interpretation of the relevant portions in English:

    Lithium ion is sexy relative to older chemistries only in terms of energy density, which is relevant primarily for both portable electronics and cars. ( Show me the nickel iron or lead acid car battery that's good for a couple hundred miles.) For grid storage apps Li-ion only relevant for it's quick response, making it appropriate in the ancillary services markets such as frequency control, but flow batteries are likely to do the heavy lifting for anything but shorter term storage or ancillary services. But the fact that USED car batteries (Li-ion or whatever replaces it) will be cheap & ubiquitous once the automotive electrification is in full swing, which means they may still have a decent market share on several grid battery apps. The 2-way power flow cars may make separate grid batteries redundant, if that concept takes off, and the car owners are compensated for those services. (The Los Angeles Air Force Base EV fleet is earning them about $100/car per year in ancillary services, and charging th

    The Tesla Powerwall is more than hype, but not particularly relevant to (read "too expensive for") the US market. For off-grid applications it's pretty useless, and old-school technology is still cheaper. They dropped the power outage backup10kwh product offering, since a small genset is cheaper and more appropriate for that application in most US markets. There are multiple Li ion offerings targeting small-scale PV behind the meter self-consumption enabling in both the German and Australian markets, where there is no such thing as net metering at retail. It doesn't have to be Li-ionfor those applications, but that seems to be where the market is going, at least in the near term.

    Ambrii's liquid metal batteries still have a shot at the scalable grid-storage market.

  34. georgepds | | #34

    A question for Dana on Seba’s video
    I took a look at the video by Seba

    Some of his numbers seem incorrect. He lists three disruptive technologies. One is the electric vehicle (EV) , and claims that it is 10x better than an internal combustion engine . Maybe, but not on a recurring cost basis

    Let’s take a Gen 2 Chevy Volt as an example. It gets 40 MPG on the ICE. If gas is $2/gallon, then that’s 20 miles per dollar

    Now let’s consider its’ electric performance, listed at a nominal 3.3 miles/kwh. If electricity is $0.165 /kwh then that’s 20 miles /dollar

    If gas drops below $2/gallon, or electricity rises above $0.165/kwh you are better off buying gas (ignoring the external costs) . In my neighborhood electricity is $0.23/kwh and gas is ~$1.80/gal, so I’m better off filling the tank than plugging in my Chevy ( or would be if i did not generate a surplus with the solar panels on the roof)

    Perhaps you can explain where Saba gets the 10x better figure

  35. STEPHEN SHEEHY | | #35

    Maintenance costs?
    Anyone have any data on how much cheaper, if any, it is to maintain an electric car? I assume electric motors are more reliable than ICE. No ignition system, no exhaust system, etc. should translate into lower annual costs, but has that turned out to be true?

  36. AlanB4 | | #36

    @ Dana
    I really hope your right, i just read an article at ThinkProgress "Leading Climate Scientists: ‘We Have A Global Emergency,’ Must Slash CO2 ASAP" and i know a fair amount about the subject so i completely hope your correct though i am skeptical (again hope to be wrong). I assume someone has studied how quickly solar panel production can be scaled and the results are encouraging, and they provide much needed jobs, and the political reality denying nonsense will slow adoption but will never stop it.

    I was referring to grid storage, for electric cars li ion is the only game in town because of energy density as you mentioned. I've read a few articles about intermittentcy and how its not the huge problem we make it out to be, i suspect they are being a bit optimistic (yes Alan can be pretty cynical) but we should use it as an opportunity to do more R&D and scale up solar panels to find out if the proposed solutions work because business as usual can't continue.

    Two interesting things IMO is china's interest in renewable energy which is necessary of course, but not just because of climate change per se, its a response to over pollution. However all roads lead to Rome. Also encouraging are the possible lawsuits against Exxon and other fossil fuel companies for their role in denying climate change and misleading the public. There are a lot of parallels to cigarettes and its possible they may face the same type of consequences which if directed properly can be used to benefit the planet, make up for some of the harm they have intentionally fostered.

    On a slight tangent how will we manage heating of homes that use natural gas, we would have to generate huge amounts of additional electricity to displace the gas we currently use, and of course sites like GBA foster economically achievable upgrades but here are hundreds of millions of homes that will take decades if not a century to fix (and some that will be hard to ever upgrade). I don't see this as an insurmountable problem, just one that needs addressing.

  37. Expert Member
    Dana Dorsett | | #37

    Can't speak for Tony Seba
    george s: Looking at this year's fuel-only costs it may seem to be a wash, but there are no oil changes, tune-ups, much simpler & more rugged transmissions, the brakes last much longer than an ICE-only car (due to regenerative braking for most of time which is true of hybrids and plug-in hybrids as well) and the anticipated lifecycle of an EV is longer than liquid-fuel burner.

    stephen: I'm sure you can google up lots of contrary opinions, but very little in hard apples-to-apples data. But the fundamentals are pretty clear, even with limited amounts of data to work from. As I understand it Tesla has had some transmission reliability issues, and problems related to their too-cool-for-school automatic door handles (seriously- leave the simple stuff simple!), but with an 8 year infinite miles warranty it's been just an annoyance factor for the owners as they work out those kinks. The Model S is still the best selling car in that class (but won't be forever, as all other luxury car owners are clamoring for the "me too, only better!" slot.)

    The Leaf has a developed a rep for being reliable at near-zero maintenance, but the wintertime range in cold/very-cold hilly locations is an issue, until bigger better battery packs become available/affordable. I'll be curious to see the unveiling of the Model 3 at the end of this month and how it compares to the Bolt or Leaf.The Norwegians are no strangers to cold & hilly, but they seem convinced that the technology will be there in time.

    Alan: The intermittency of renewables is a bit of a red herring except when looking at fairly high penetration rates of just one type of renewables, on grids designed for one-way power flows. The backfeeding problems on overly PV-laden feeders seen in Hawaii are solved pretty cheaply with modest amounts of storage (either side of the meter), and smart loads, and that's now built into their grid-location specific permitting. (With a battery and a smart hot water heater in the package you can jump to the head of the line, a package that Solar City is now offering based on the revised rules, at a price cheaper for the whole package than some of us in the US would pay for PV-only.)

    It will be a long time before renewables dominate the US grid- longer than the EV transition to dominance by maybe a decade(?), but thermal coal is pretty much toast, with or without the CPP on cost basis alone. You'll note that the unsubsidized LCOE of grid-scale PV in Lazard's 2015 analysis is already pretty much on par with combined cycle gas (at historically low natural gas prices), and will probably come in slightly lower by the end of 2016. By 2020 PV will be cheaper than wind or CC gas. New generation capacity is already dominated by renewables, and that may accelerate if less economic fossil burners end up being slated for early retirement in the face of the PV tsunami. Smarter grids and smart car chargers would make that easier/more economic to do, and with policy support in the left-coast states it's probably going to happen there first. Oregon has pretty good policy support for EVs, and they just signed off on removing all coal-fired generation from their grid sources, which includes some powerplants in Montana, which is pissing off some of those folks who will be out of a job. (Nobody says creative destruction is going to be easy or fair to all partys.)

    China's renewables interest has many layers, pollution being very high on that list, but it's also monetary- hard currency reserves spent on coal or oil imports could be (and are being) put to much better use at home. The simple math says that if Chinese drive as much as North Americans the world's cheap oil will be gone extremely quickly (which had led them to a huge coal-to-liquids program, abandoned only recently.) Climate skeptics aren't running the political classes there, and quite a bit of pragmatism. With large low lying coastal cities like Shanghai they have a lot to lose by ignoring the climate problem, and the political pressure to simply clear the air & water they can't keep burning fossils in high population density areas. There's a lot to criticize in China, but when policies shift (as seems to be happening in this 5 year plan) it affect markets well beyond their borders/shores. From an export revenue point of view China wants to own a large share of the wind & solar markets worldwide (and they do), but they also want to own a big slice of the EV market (and they will.)

    India's drive for solar under Narendra Modi is nothing short of breathtaking in scope. In that country alone they intend to install more PV (primarily utility scale) by 2020 than the entire installed base in the world to date. For them it's both a pollution and cooling water shortage issue, but a hard currency problem too, having been burned by Indonesia on coal prices when Coal India was unable to handle the domestic demand a few years ago. They just got burned on a WTO decision regarding their domestic content requirements on projects, but that's not going to stop it from happening (it may even speed it up, since ramping up domestic production of PV fast enough to meet their 2020 goals looked nearly impossible.)

    Either way, worldwide the PV party is just getting started, which will drive the price down even faster on a calendar time basis.

  38. AlanB4 | | #38

    I agree intermittentcy is a red herring to a fair degree (just like the mercury in CFLs), but it has some truth and your right, its nowhere near insurmountable. I do think we should be spending more R&D money on this because the technology would be very useful, but even if we don't progress will still happen, just much more slowly. I do not agree with Bill Gates that we need miracles to make it happen, but we do need to focus.

    I completely agree that thermal coal is toast and thats good, with its high CO2 concentrations it needs to be kept in the ground starting right now, though natural gas is not as good as we like to think, it also needs to stay in the ground faster then is acknowledged.
    Your correct that creative destruction is pretty ruthless, especially to those who don't like progress which encompasses much of the public unfortunately.

    I'm glad china has become serious, as long as they stay the course it benefits all of us.

    I don't know much about India's plans, though i should, i do hope the TPP is rejected, its basically a corporate giveaway and a huge favour to fossil fuel interests.

    "Either way, worldwide the PV party is just getting started, which will drive the price down even faster on a calendar time basis."
    I'm very i'll believe it when i see it, i don't like to let things happen and accept they will work out on their own, i'm very we have to steer the boat where we want it to go and keep our eyes on the prize till we get there.

  39. Expert Member
    Dana Dorsett | | #39

    It's not an R & D problem
    The solutions to renewables intermittency are have already been developed, it's only a matter of implementation. In some places the regulatory environment needs to change to facilitate that, and there are both investor owned and public owned utilities that will be gored in the process. Minimizing the pain while maximizing the gain isn't always easy or obvious.

    Bill Gates' expressed belief in the need for "breakthrough miracles" to fix the energy problem is hard to fathom, given that his own success was made on exponential expansion of existing technology driving prices down. What doesn't he get?

    Jigar Shah (founder of Sun Edison, author of "Creating Climate Wealth", and founder of Generate Capital never misses an opportunity to publicly skewer Gates on how clueless Bill is about how rapidly the world of energy has evolved:

    You can probably guess whose perspective on this I tend to agree with. :-)

    India's somewhat shaky grid is dominated by thermal coal, with some nuclear, all of which have cooling water requirements. That has led to curtailment of output in many areas during the dry seasons, and competition with agriculture for the water resource at other times. Only about half the power going onto India's grid gets metered & paid for- electricity theft is rampant, and off peak power is effectively donated to the agricultural sector (which couldn't necessarily pay.) Getting anything done in India is difficult due to competing interests, and entrenched bureaucracy at every level. Even where the grid exists, extending it to the next village involve paying off the local "bidgely board" (bidgely == electricity ) members to get permission to extend the transmission lines, and access is often determined by caste & class. As a result the off-grid population of India is larger than the population of the US.

    When Modi was elected he promised to have at least SOME rudimentary electricity in every Indian household by 2020. Sometimes that's a solar lantern, but increasingly it's local solar microgrids, often not far from the grid, but made affordable and possible by having local control. But there is a huge push toward very large scale solar projects going onto the main grid. Under long standing policies of the previous government(s) Coal India (a large monopoly) was driving the ship, and the coal generation capacity became over-built (currently running at something like 50% capacity factors). There are even brand new coal fired plants that have never been fired up(!), but perhaps should be, if they would simultaneously retire some less efficient capacity. Prior to becoming Prime Minister, Narendra Modi had been governor of Gujarat (an arid western state bordering Pakistan), and during his tenure there presided over a large expansion of solar capacity, which had the effect of Gujarat's grid leading the nation on reliability. While there are things to be concerned about with the Hindu Nationalist Party being in power (including the rights & treatment of religious minorities), energy policy seems to be moving strongly in the right direction, for both India's power needs and the climate.

    Some perspectives on India's solar policy:

  40. AlanB4 | | #40

    @ Dana
    Thanks for those links
    We basically agree with a few minor differences, i would push for more R&D money to complement (and of course not displace) increased solar/wind incentives and spending.
    Nobody would be happier to see faster renewable deployment, and i hope your projections are correct.

  41. Dana1 | | #41

    Breakthroughs welcome, but not necessary!
    I have a great deal of hope that perovskites and other bleeding edge thin film PV technologies will insert a quantum step downward in the PV cost curve, which will require more than just angel & VC funding to pull off. On the battery front, I think private capital can improve Li-ion sufficiently in power density and cost to get there, but there are plenty of bleeding edge battery technologies worth exploring.

    But the key is to stop waiting- the stuff we already have is good enough AND cheap enough, even if better stuff is still in the wings. (I'd like to see Transatomic's molten salt mini-reactor funded for a demonstration installations too, since it uses spent fuel rods as fuel, reducing the danger lifespan from 10s of thousands of years to a few hundred, while reaping 18-19x more energy out of the fuel than the original reactors did.)

    Meanwhile in India this season's thermal power curtailment is in India is in full swing:

    So much for the "we have to burn fossil fuels to rid the world of energy poverty" theory being promoted by Bill gates (and the Koch family.) In India all thermal power is in direct conflict with agriculture for the (variable) water resources, with the exception of a few coastal powerplants using sea water cooling. Without massive grid expansion coastal power plants aren't going to power up the large populations of the interior- local PV is much cheaper, lower risk.

    Even relying on hydro power is a questionable approach in face of an increasingly variable climate, as seen by the power production figures during the California drought (and seasonally, in India).

    What's going to pick up the slack- biofuels? (En sus sueños!)

  42. Expert Member
    Dana Dorsett | | #42

    More evidence that PV installations are going to accelerate
    At the utility scale PV is already at parity (unsubidized) with combined cycle natural gas. Compare levelized cost comparisons on page 2 of Lazard's November 2015 report:

    Unsubsidized, utility-scale PV (thin film or crystalline) lifecycle levelized cost was running $50-70 per Mwh in 2015, compared to combined cycle natural gas at $52-78/Mwh.

    But for the next five years PV is still subsidized in tax law, making it 30% cheaper than combined cycle gas right now (after subsidy), and at the rate PV costs are falling, by the time the subsidy evaporates it'll still be MUCH cheaper than natural gas (both fast ramping single cycle and combined cycle) by a good margin.

    Not surprisingly, the utility sector understands this too, and are buying it at increasing volumes even when not required to by regulators/legislators. More than half the existing 2016 pipeline of utility scale solar projects in the US are not required by the state renewable portfolio standards:

  43. AlanB4 | | #43

    "But the key is to stop waiting- the stuff we already have is good enough AND cheap enough, even if better stuff is still in the wings."
    I completely agree, and if the Tesla Model 3 performs as well as hoped (they have had multiple drivetrain problems and replacements with the Model S) and the other automakers kick in their production of electric then gasoline will become a dinosaur (pun intended) much faster then hoped.
    Also if new battery technology or further lithium refinements do come online grid defection may become more plausible, though its unlikely to be as widespread as cable (tv) cutting.
    Its good to see the US will likely cut the fossil fuel fuel out from under them, despite the vehement climate denial, renewables costing less then fossil fuels will lead to fossil fuel cuts shown in your links.

  44. georgepds | | #44

    Energy map of the US by Lawrence Livermore
    For those who want to track where it comes from and where it goes, you can’t beat the energy map of the US by Lawrence Livermore Labs. It’s pretty amazing how solar and wind have grown in the last 10 years. Still tiny compared to fossil fuels, but growing

    Latest year (2014)
    Previous years

  45. Expert Member
    Dana Dorsett | | #45

    The key is that it's growing EXPONENTIALLY, not linearly!
    The LBNL energy flow maps are snapshots in time, and miss the dynamic picture of how rapidly things are changing (or can change).

    Even though solar is a tiny fraction, when it's doubling every two years or less (which it is), once it has crossed the 1% line (which it has) it's less than 15 years away from being over 100%.

    Wind has seen exponential growth in the US too, and has a head start on solar, but it's cost numbers aren't falling as fast, and it's harder to site it near the load, and is not as scalable on the small end. The most recent EIA electricity monthly shows how the wind growth may have started to flatten in trajectory a bit toward linear rather than exponential expansion, but also shows the rising arc of what is destined to become a PV tsunami, overtaking wind before 2020:

    Note, they only include utility scale PV in that analysis. Without small & mid-scale distributed solar's contribution showing, the PV contribution is somewhat under-represented. Distributed PV accounted for about 40% of the total new PV installed in the US 2015, but is expected to become an even larger fraction of the total going forward. The wave is already higher than it looks in those graphs.

    Meanwhile, team India is targeting 100% electric for all new cars by 2030 using a combination of creative financing and cross-subsidy incentive/dis-incentive structures:

    But wind isn't just lying down. The world's largest generator is the Three Gorges Dam in China, but China added that much nameplate wind capacity as the Three Gorges Dam in both 2014 and 2015, and will be installing even more this year, and even with lower capacity factors calculated will be producing more power from wind installed 2014-2016 than from that mammoth project that took 18 years to complete. In the US we're deploying about one Hoover Dam's worth of wind PER MONTH.

    Oil (and by extension, liquid biofuels) isn't dead yet, but it'll be looking pretty sick in a decade.

    Alan B: As battery technology improves on price/performance grid defection would be one of the WORST outcomes, since that would take more resources to implement, leave a shrinking population of less well-off or sunless ratepayers on the hook for the sunk costs of the grid, and would deprive the grid of the value & function of those distributed resources. It's going to take regulatory reforms of the type currently under way in NY to do it well. If they screw it up Australian-style (the way they seem to be going at it in Nevada recently) it may very well enter a grid-defection & utility death-spiral scenario, which would be more expensive for everyone. There some good bedtime reading on the topic recently published on Lawrence Berkeley's website:

  46. georgepds | | #46

    The problem is policy
    A good primer on how “wind and solar has the potential to make the US (and China) truly energy independent” with current technology is Joe Romm’s article

    But even Joe notes: “it seems increasingly clear that a combination of the technologies and strategies discussed above will be able to incorporate very large amounts of renewable electricity into the electric grid cost-effectively. The “intermittency” problem is essentially solved. The will-power problem, however, isn’t.”

    By that he means, in part, obstructionist policies of electric public utilities. Take a look at the article prepared by Peter Kind for the Edison electric institute: “Disruptive Challenges : Financial Implications and Strategic Responses to a Changing Retail Electric Business”

    What does Peter advise as necessary Immediate actions
    “1) Institute a monthly customer service charge..
    2) Develop a tariff structure to reflect the cost of service and value provided to DER customers..
    3) Analyze revision of net metering programs in all states …”

    The strategic response is to stick it to the customer who generates a surplus. This response is typical of public electric utilities. They are not considering re-engineering the grid to handle bi-directional flow, or to smooth out variance in wind/solar energy production, no, they are throwing up regulatory barriers wherever they can, and sticking to their ancient business models.

    Though I believe we might be able to re-structure energy supply with current technology, the problem is entrenched interests. In the above case it is the public electric utilities. That’s why I think there is room for new development in storage. It let’s you simply walk away from the electric utility, and let their public obstructionism wither away.

    Let me talk in terms of a true disruptive technology: long term storage, storage capable of transferring energy gains in the summer to energy use in the winter .

    Such a development would allow those of us who are net positive to completely disconnect from the grid. Right now, if you produce excess, you pour it onto the grid, and get reimbursed through net metering. This rational policy is being fought tooth and nail by nearly every electric utility in the country, take Nevada for example, or the recent proposal to the Iowa PUC.

    It’s not that hard to produce more energy than you use, even up here in the cold dark Northeast. What’s difficult is dealing with the uncertainty of the electric company policies in planning capital outlays. Do the electric companies have a case to make? Sure. The grid is designed to transmit power one way. To accommodate extensive distributed generation, they are going to have to rework the transmission and distribution system.

    Develop local long term storage, and you remove the necessity for updating the grid to handle bi-directional flow. As a plus, you develop a more stable supply, not susceptible to the ice storms that plague the distribution system each winter. That, and you obviate the need for local micro-grids.

    Each of us could be our own micro-grid.

    We could look forward to a future in which residential electric companies withered away, and they could stick to gouging their industrial and commercial clients.

    So, current technology may be sufficient, if only the electric utilities would co-operate. Disruptive technology, such as local long term storage, would make their co-operation unnecessary.

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